Korean won to the US dollar dropped sharply on December 3, 2024. It came as Korean President Yoon Suk Yeol in an unprecedented move declared an emergency martial law, citing threats from anti-state forces and North Korea.
The move triggered swift parliamentary action, with both sides voting to veto the move. In addition, protests sparked in Seoul and Korean military was deployed into the city. The situation brought the exchange rate to its lowest against USD since 2022. A key talking point for financiers and investors involved in the Korean aviation finance industry is contending with the weak exchange rate to US dollar.
Speaking to Airline Economics Korea Aero Capital Solutions CEO James Choi said the impact on the aviation financing market in the Korea may be “slightly affected”. He added: “In the short term, Korean won will be weak continuously and the stock market will be unstable. But, if you look at the trend of Korean won and the Korean stock market, the performance has already been poor in the last of couple of months.
”Parliamentary powers had quickly overturned the move in a matter of hours. The currency has seen a steadily recovery since, though not quite a full recovery as of December 4, 2024 at 10:30 GMT.
In addition, demand for travel will likely remain sustained, with martial law declaration not being the result of war or state emergency, said Choi. Rather, he adds, it was driven by political tensions between the ruling party and its opposition.